Real Estate Finance

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        World of Finance by M.Vijaya Sai


Real Estate Finance development


Real estate investment means investing in immovable properties like land and properties attached to it like buildings. Real estate investments can provide alluring returns and these returns attract plenty of investors. Demand for these real estates are constantly at a rise and it is a good idea to have a better idea about the different financial options.

The leading developers employ asset managers and these managers can offer a clear idea about the different finance options and as a result the borrowers get the benefits. The entire process of real estate purchase and sell happen within the guidelines of the Federal government.

Real estate can be used as collateral for mortgages and financial assets. Many investors across different nations follow different strategies for offering real estate finance opportunities to the potential property seekers. There are different financial service providers that offer financial assistance during real estate development and it is a good idea to have a clear insight about the different real estate loans that comes with tax exemptions.



Demand for real estate finance opportunities have been popular since last few years. The conventional investors are at present investing in real estates. At present it has been much easier to get information about the different real estate finance options and there are plenty of web portals that provide information about the real estate finance companies.

The Real Estate Investment Trust (REIT) is an investment trust or a corporation that deals with investments in real estate, the trust recommends about different features that eliminate corporate income taxes.

There are different types of real estate loans and these loans serve different purposes. The residential loans are used for residential purposes and the commercial real estate loans are used for different commercial purposes. While obtaining a real estate loan it is necessary to have a clear insight about the Annual Percentage Rates( APR).

Investors with poor credit stature should not lose hope. Loans like bad credit real estate loans are formulated for individuals with poor credit reports. Although the risk remain higher in case of real estate finance but it is a good idea to allow individuals to obtain a mortgage from a particular company when more traditional companies might refuse the real estate loan.

Real Estate Mortgage Finance



Finance has many branches and real estate finance is one of them which manages the investments in the real estate business like acquiring plots of land, making houses, gardens, other buildings, etc. for business purpose. Like any other arm of finance, this sector also has its own risks and gains which are managed by the professionals to increase the acquired property's value.

The term real estate means plots of land, houses and any kind of man made improvements on the plot of land. Now, real estate investment means investing the money in the above mentioned properties with a purpose to let that money grow steadily. Real estate investment is a golden business opportunity which can help the money to grow manifold because there is several options related to real estate like placing a real estate property as a security to avail a loan for any professional purpose. Again the property can earn cash in the form of rent, for the investor or owner and at the same time it can save some part of taxes for its owner. Again, the appreciation value of the real estate property reaps capital gains or profits for the investors.

Because of all these growth prospects, the professionals and experts of this field always suggest that a person should always include real estate in the investment plans. Although it is a long term process but returns heavily and also it is a steady medium and because of this, the equity investors and borrowers holds that, any investment decision related to real estate is a financing decision. The real estate mortgage business can be said as the most recent growth in this sector.

Mortgage, as an investment option


Because mortgage loans are underwritten carefully with required credit and collateral, they are extremely safe investments and thus it is a sound investment option. The real estate and mortgage industries are expanding rapidly and most experts from the real estate field are suggesting to consider this type of investment seriously. A huge amount of money, which is more than trillion dollars are growing steadily in residential mortgages and commercial mortgage markets. An individual investor buys mutual funds and becomes a part of this market. Now-a-days, residential mortgage is very rapidly, becoming the usual process of buying a home.

Mortgage Loan
The definition of a mortgage finance or loan can be given as a loan which remains secured by the collateral which means the physical property. This loan or finance is granted to buy a material possessions or real estate, and the loan which carries a definite loan term and interest rates. If the borrower fails to return the money in time, the lenders becomes the legal owners of the collaterals.

There are several terms related to the process:



  • Face Value: The face value of the mortgage is the original principal amount financed by the lender.
  • Mortgagor and Mortgagee: The borrower is called the mortgagor and the lender is called the mortgagee
  • Term: The period in which the borrowed amount should be returned with the interest. The term usually consists of 20 to 25 years and fixed interest rates are proposed for 6 months to 5 years period.
  • First mortgage and Second mortgage: The current mortgage is called the first mortgage and the second mortgagee is termed as the second mortgage.

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